Bankunited Small Business Loan Volume More Than Quintuples

By Zachary S. Fagenson
BankUnited, reporting its small business loan volume for the first time since a May 2009 buyout by a consortium of private-equity firms, held about $340 million in small business loans at the end of this year’s first quarter.

That’s a huge leap from about $60 million in small business loans the bank had on its books on June 30, 2009, the quarter in which New York banker John Kanas, backed such firms as WL Ross & Co. and the Carlyle Group, purchased the ailing bank with Federal Deposit Insurance Corp. assistance for about $900 million.

At the time of the takeover, BankUnited’s new management consistently said the bank would turn away from mortgage origination, which led it to the brink of failure, and instead focus on small business banking.

In addition to revamping the executive management structure and bolstering business banking staff, BankUnited in late 2009 launched an Express Credit program that aims to turn around loan requests of under $75,000 in 24 hours and larger loans within days.

The product is "basically a simple borrowing facility, a one-form application," said Bernie Adrover, senior vice president and director of Small Business Banking.

"When BankUnited was reconstituted, we basically realized that in South Florida we had an underserved market in [the] form of small business clients," he added. "The express credit launch was to serve that particular need."

For the previous two quarters, no information on BankUnited’s small business lending was available through the Federal Deposit Insurance Corp.’s website.

But for this most recent quarter, the bank had $2.8 million in loans, each under $100,000, secured by non-farm, non-residential properties.

It also held about $45.5 million of commercial-industrial loans each under $100,000, a big leap from June 30, 2009, when the bank held no commercial-industrial loans.

Meanwhile, it also reported about $190 million in loans of $100,000 to $1 million backed by non-farm, non-residential properties, and another $100 million of commercial-industrial loans in the same range.

BankUnited doesn’t report how many of its small business loans are Express Credit loans.

During the first quarter of 2010, BankUnited added $140.2 million in loans to its balance sheet. About $84 million worth were nonmortgage commercial loans.

It classifies small businesses as those with revenues less than $10 million a year and offers them loans and credit lines up to $1.5 million, Mr. Adrover said. The bank works to turn around express loan applications for more than $75,000 in about three days.

"We usually don’t ask for financials," he added. "We ask the right questions and take it from there."

But the bank is not looking to do business with only smaller startups. It also works with established firms with revenues of up to $500 million or $600 million a year, he said.

"Most of the other banks are probably abandoning the small business community," Mr. Adrover said. "As the economy turns around we’ll probably look for a more customized product" to serve larger companies as well.